Please take the time to ask yourself how you understand the above, before continuing with the talk below…

A student asks “Does the cypress tree have buddha nature?”

A preliminary question would be: what is buddha nature? Nāgārjuna —a great Indian philosopher— in his Verses from the Center said that Buddha nature is the nature of this world. Buddha nature has no nature, nor does this world. That is to say: buddha nature and the world both are emptiness ('no nature,' i.e. no essence), and emptiness is empty.

What is emptiness? It is the absence of an independent 'self,' an essence independent from a web of conditions and circumstances. 'Conditions' usually refer to the 'causes' or simply the 'background' from which the being arises. Basically, emptiness is when a being cannot say "it is in my (independent) nature to…"
Upon observation, the whole world is empty because nothing has a nature to exist (let alone evolve or live or create) regardless of the circumstances. Any tendency has to meet supportive conditions in order to mature, existence itself requires supportive circumstances, the very distinction of anything requires the existence of a 'something else'… hence there is nothing with an independent 'essence:' every thing is nature-less or 'self'-less (i.e. any thing is defined "in relation", "in context").

So, having mastered Nāgārjuna's teachings, the insightful teacher thus hears the student's question “does the cypress tree have buddha nature?” as: “Is the cypress tree 'empty' of any essential self (i.e. of a self independent from a web of conditions)?” No surprise then that he answers“It does.”
Not only the cypress tree as we see it (a concept, categorised in a biological family, without much attention to what makes this particular tree different from other trees of the same family) is 'empty,' but the real tree is 'empty'! Why? The concept is born from a contact with the world, and from grouping different perceptions under one category, and from an intention to understand the world, to make it predictable hence safe… The concept does not exist independently from such conditions. Similarly, the tree did not appear spontaneously: it required a seed, a fertile soil, water, light, temperatures within a certain range… and none of these conditions were themselves independent from their own web of conditions.

Greed and hatred are based on ignorance, the childish illusion most beings have that "the world would be so much better if only this (insert personal preference) was different." Greed and hatred are based on the illusion that there exist things whose 'nature' is pleasurable or disagreeable, independently from circumstances.
Realising the emptiness of all things, experiencing emptiness, and thus destroying such illusions are insights that a buddha experiences, hence the name of 'buddha nature,' but such experience is 'lived,' it is not an object or a place or even a 'separate' process (karmic or whatever). Emptiness (or 'buddha nature') is empty.

Unfortunately, the student has reified buddha nature, he has made emptiness to be 'something' (a karma seed maybe, or a characteristic of beings, etc.) that leads to the fruition of Buddhahood. Hence he asks“When does it become buddha?”

The misunderstanding by the monk (emptiness being something, i.e. not empty itself) is decried by Nāgārjuna in unambiguous terms: believers in emptiness are incurable.
Clearly, emptiness is empty of any essential, independent existence: e.g. emptiness is (at the very least) dependent in particular on our illusion that things do have a 'nature'!
Zahozhou now has to dispel such misunderstanding by the monk but words are risky, as exemplified by the reification of 'buddha nature'… Words cannot tell the Truth, only point to it. The answer of the master should hopefully show to the monk the absurdity of making 'buddha nature' be something that leads to Buddhahood.

“When the sky falls to the ground.”
This is a multi-level answer, a marvellous spiritual millefeuille:

1. the sky never falls to the ground. What is left after the sky fell? Another sky? Nāgārjuna says that "no trace of space is there before the absence of obstruction which describes it." The sky doesn't fall to the ground, because the 'sky' is defined as 'not the ground' (and, as such, is empty of any essential nature). If the sky never falls to the ground, the cypress tree never becomes a Buddha. As a cypress tree, this is just factual;

2. Nāgārjuna also states that "in seeing things to be or not to be, fools fail to see a world at ease." _We_ separate the concepts 'sky' and 'ground' in separates entities, although they are not separate for real: the sky starts where the ground stops, and there's no distance to 'fall' between the two. The tension created by the idea of 'the sky falling' puts on display a tense mind (tense from clinging to concepts which do not capture things 'as they are'), rather than a tense world;

3. there's no distance, no separation between 'sky' and 'ground,' no more than there's separation between the cypress tree, buddha nature, buddha… they're all empty (concepts), there aren't different types of emptiness which we could distinguish. Nāgārjuna says "when transfixed on what's unwavering beyond fixation's range, you see no buddha nature" i.e. the concepts, fixated ideas, put a veil on the empty nature of 'things.' The student has reified emptiness, made emptiness to be something, hence he has obscured the nature of reality. "Buddha nature is the nature of this world. Buddha nature has no nature, nor does this world." i.e. 'buddha nature' is emptiness and emptiness is empty;

4. if one poetically interprets the sky falling to the ground, a lightning storm might be an appropriate image: it would refer to the sudden insight of emptiness. A deep insight of emptiness is an Earth-shattering experience, because the lack of 'nature' is suddenly seen about everything; the Mahāparinibbāna sutta [DN 16(.3.17)] mentioned that when the Tathāgata gains unsurpassed enlightenment, then the earth shudders and shakes and violently quakes;

5. Continuing with this poetic interpretation of the sky falling to the ground, a deep insight of emptiness is an Earth-shattering experience, because the lack of 'nature' is suddenly seen about everything: the sky-high castle made of our concepts, views, preferences and opinions suddenly collapse onto the reality, onto the ground (of our concepts) 'as it is.'
One may note that if one questions the 'nature' of the ground, its essence is never found as one digs deeper and deeper in the soil (it is 'empty' of essential nature); however the existence of the ground is reliable enough to support sky-scrappers…

6. another poetical image tells us that the sky covers everything; and so does emptiness…

7. just for fun, one might note that what is 'inserted' both in the sky and in the ground is the cypress tree. So, isn't the cypress tree what prevents the sky from falling? ;-)

Ultimately, the student needs to let go of 'nature', of 'essence' (incl. the hypothetical essence of buddha nature), that is "wisdom," and the teacher cannot 'let go' in place of the student. Unfortunately, when presented with the above gorgeous multi-faceted diamond-answer “When the sky falls to the ground,” the student takes the explanation literally:“When does that happen?”

“When the cypress tree becomes buddha.” Emptiness is the same, no matter in which order one puts concepts on the table. A true insight in emptiness will lead to seeing the emptiness of concepts like 'sky' and 'ground' simultaneously to seeing the emptiness of other concepts, like 'cypress tree,' 'buddha nature' and 'buddha.' There aren't different types of emptiness.
The circular answer is solved in the flash simultaneously shedding all obscurity: all 'mental constructions' stop at once, i.e. all creations and reifications of concepts from perceptions stop, when emptiness is experienced.

The reversal of order naturally echoes the Heart sūtra too: “form is emptiness, emptiness is form.” Everything is empty (as a mental construction, i.e. as an un-enlightened human experience), but emptiness is not nothingness: you cannot pin down your 'self', but whacking a stick on your head still hurts!